The FOMC statement was hawkish and the Fed has clearly given a message to the markets that they think the weakness in the economic data is only temporary.

This means that the Fed is more than happy with their current strategy and more rate hikes are coming this year - at least for now.

Neil Wilson of ETX Capital predicts that Fed official will start dropping hints of a June rate rise soon - if they’re really getting ready, that is....

The Fed is in no rush to raise rates too quickly as it’s fully aware that rising inflation is less of a threat than tightening too fast, noting that it will stabilise around its 2% target. On the whole, today’s decision changes very little in the assessment for

monetary policy. All eyes now on the minutes from the meeting and jawboning from officials in the coming weeks.”

And Paul Ashworth of Capital Economics points out that the US jobs data (starting on Friday) will be crucial...

On balance, we still think that the Fed will hike again in June, although that assumes employment growth rebounds in April and May. The drop off in core inflation is a concern, but the global economic backdrop is much stronger than it was last year. Furthermore, although the Fed hiked rates twice since late last year, financial conditions have actually loosened, with the dollar and bond yields both falling, while stock markets have performed strongly.

Fed leaves US interest rates on hold

A late newsflash: America’s central bank has left interest rates on hold.

The Federal Reserve also predicted that the slowdown in the first quarter of 2017 was probably only temporary. That could be a sign that the Fed could raise interest rates in June.

The Fed’s statement looks quite hawkish, with US policymakers pointing out that the US jobs market looks solid, firms continue to invest, and inflation is close to its target.

Here’s the key section:

Information received since the Federal Open Market Committee met in March indicates that the labor market has continued to strengthen even as growth in economic activity slowed. Job gains were solid, on average, in recent months, and the unemployment rate declined. Household spending rose only modestly, but the fundamentals underpinning the continued growth of consumption remained solid. Business fixed investment firmed. Inflation measured on a 12-month basis recently has been running close to the Committee’s 2 percent longer-run objective.

Traders on Wall Street like the look of the statement, sending shares up:

Positive day for most European markets

With better than expected eurozone GDP figures, markets managed to edge higher for the most part. Exceptions were France, ahead of the country’s presidential debate later, and the UK, with investors unsettled by the increasing testy relations between the country and the European Union. The final scores showed:

The FTSE 100 finished down 15.52 points or 0.21% at 7234.53

Germany’s Dax rose 0.16% to 12,527.84

France’s Cac fell 0.06% to 5301.00

Italy’s FTSE MIB edged up 0.13% to 20,759.31

Spain’s Ibex ended up 0.15% at 10,837.0

In Greece, the Athens market added 2% to 748.61

On Wall Street, the Dow Jones Industrial Average is currently 21 points or 0.1% lower.

On that note, it’s time to close for the evening. Thanks for all your comments, and we’ll be back tomorrow.

Sterling has slipped back after Theresa May accused the EU of attempting to influence the outcome of the UK general election.

The pound, which had earlier climbed as high as $1.2949 against the dollar, is currently down 0.26% at $1.2902. Jameel Ahmad, vice president at FXTM, said:

While the British Pound has hardly tumbled as of writing, the comments from Theresa May on Wednesday afternoon do go some way towards disclosing how strained relations with the European Union have become after invoking Article 50, and the risk of them becoming worse are significant when you consider how tense the negotiations with the EU are likely to get over the next two years.

“Ongoing rain in Northern California is degrading the quality and increasing the prices of some vegetables, such as iceberg lettuce, broccoli, napa cabbage, and some varieties of romaine.” (Accommodation & Food Services)

Following the US private employment numbers, analysts are looking forward to the official non-farm payroll figures on Friday. And there could be a bounceback after last month’s disappointment, some believe. David Morrison, senior market strategist at Spreadco, said:

ADP for April showed the US added 177,000 private payroll jobs, pretty much as expected.

Last month the ADP number beat expectations by around 80,000 jobs. This led many analysts to upgrade their forecasts for the Bureau of Labor Statistics’ Non-Farm Payrolls. But these missed even the unrevised predictions by over 70,000 raising concerns about the outlook for this Friday’s number.

The expectation is that last month’s number was a seasonal aberration, so the hope is we get a strong bounce-back in the data in two days’ time. The current forecast is for a gain of around 200,000 after the 98,000 recorded in March.